The Rise & Decline of Apple’s App Store

The Rise & Decline of Apple’s App Store

When Steve Jobs took to the stage on the 29th June 2007, he promised to reveal three new products: a touchscreen iPod, a mobile phone, and a ‘breakthrough internet communicator’. Minutes later, he spectacularly announced that this was all one device: the iPhone.

After the initial wave of excitement, developers were quick to ask what sort of freedom they would be given on app creation. Jobs firmly believed that Web Apps were the future, and that Safari would give developers complete freedom to create and innovate. But, developers were not so keen.

After the original iPhone was ‘jailbroken’, developers quickly ditched the HTML 5 coding on Safari to build native apps. Despite his stubbornness, Jobs saw the writing on the wall with jailbreaking and gave in to the rumoured pleading of his team. According to Jobs’ biographer Walter Isaacson, Jobs had denied the idea of third-party apps at least ‘half a dozen times’.

On October 17th 2007, he announced the Software Developer Kit (SDK) for third-party developers to start building apps. “We want native third-party applications on the iPhone and we plan to have an SDK in developer hands in February.”

When Apple launched their App Store on the 10th July 2008 with 500 applications available for download. Many of them basic, but they showed off the features that would eventually attract a widespread audience. And so, the mobile app boom began.

From a Steve Jobs rejection to one of the most profitable ideas in the industry...

In less than two months, Apple’s App Store managed to reach 100 million downloads. In less than one year, the App Store managed to break a billion worldwide downloads.

Come the App Store’s 1st Birthday, Apple revealed the influx of apps available to iPhone users had ballooned to around 65,000.

The exponential growth of the App Store was most evident in January 2010. Apple had gone from one billion downloads in a year, to 10 billion in three. By June 2016, total downloads had surpassed 130 billion.

Apple even ran a marketing campaign with a catchphrase that would enter the mainstream: “there’s an app for that”. And to date, the App Store has generated in excess of $70 billion in revenue.

The mobile device market continues to grow globally, apps are still being made, and they are still being downloaded. However, not at the same rapid rate of years gone by.

App Store Submissions fell 82% in 2017

Apple's App Store submissions declined violently throughout 2017 as the app economy became increasingly saturated. The total number of submissions for 2016 amounted to 928,505, but the total for 2017 was just 159,997 – an 82% decline. Furthermore, the trend looks set to continue for the remainder of 2018. The total number of submissions for January 2018 was 14,325 – just over half of the 25,671 submitted in January 2017.

Number of applications for the release of newly developed apps in the Apple App Store from 2008 to 2017

As we reported back in August 2017; many services fulfilled by native apps, such as word processing, document sharing, accounting and mobile ordering, can and are now being fulfilled with increased accessibility and flexibility via cloud-based apps.

Thus, it is a not a coincidence, given the benefits, that many cloud-based apps have experienced widespread adoption. In fact, many have completely overtaken their native app counterparts in terms of users and revenue. These include Office 365, Google Docs, Salesforce and QuickBooks. Not only do these cloud-based apps integrate seamlessly into our current behaviours, they also, due to their SaaS pricing models and ability to expand services via integrations and APIs, mitigate the risk of getting stuck with an incumbent solution. For a more visual comparison, you can check out our cloud vs apps page here.

We have previously explored the native-app economy and the rise of cloud-based apps in our own industry report. If you would like to learn more about getting ahead in hospitality through mobile ordering, you can download a free copy of our report here.